Interpreting InTrade’s Obama reelection data

InTrade.com is a prediction market where anyone can pay real money to bet on the election. Intrade is a more reliable predictor of political outcomes than opinion polling. People, when asked, will speak as irrationally as sports fans, but they become reliable predictors when betting their own money. Individually, people are wrong, but as a crowd, a majority of people will predict correctly  – that’s why crowdsourcing works.

Question: Will Barack Obama be reelected in 2012?

Buying a share means you say yes. Today, “yes” shares were selling at $5.74, meaning the market is placing his chance of winning at 57%. You can look back at 2011-2012 and see how the news cycle has influenced investor/gambler confidence in Obama’s reelection:

The most interesting non-factor was the Supreme Court decision on ObamaCare. It made no difference. Killing Osama Bin Laden, on the otherhand, led to irrational exuberence on InTrade for a week. Obama going on TV when his jobs bill was blocked turned out to be a success. And the Republican Primaries did not instill confidence in Republicans winning the presidency, as seen from Jan’12 through Mar’12 data. Obstruction of the jobs bill has been the most effective Republican strategy for regaining the White House. However none of their other obstruction tactics seems to have made a difference.

Another InTrade insight:

Obama’s reelection only looked vulnerable in one month since 2010, and he was able to get back above 50% just by going on TV.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s